Filing obligation for cross-border business

When you are a foreign legal entity with a Dutch branch, i.e., you are based outside the Netherlands and have a branch in the Netherlands, you are required to file your financial statements with the Chamber of Commerce in the Netherlands. This applies to both European and non-European legal entities. Failure to comply is subject to major fines.

Filing obligation

The filing obligation ensures that certain financial information about your business, as provided in the law, is available to anyone who is interested. This includes your balance sheet, profit and loss account and explanatory notes. This information paints a picture of the situation at your organisation from a business perspective. It gives third parties a good understanding of the business, for instance when entering into an agreement or engaging in a (m&a) transaction.

Registered office

The filing obligation applies to foreign legal entities with a branch in the Netherlands. When does an entity qualify as foreign? To establish this, we look at the entity’s registered office, in other words, the official address where your organisation has its legal headquarters based on its articles of association. The location of the registered office determines the legal entity’s country of origin. If the company has its registered office located in a country other than the Netherlands, your organisation will qualify as a foreign legal entity.

Foreign filing

If your organisation qualifies as a foreign legal entity with a branch in the Netherlands and the company is required to file its financial statements in the country of origin, it is expected to file its financial statements in the Netherlands as well. The financial statements can be filed in the same form as the original foreign financial statements. When the foreign financial statements are in German, French or English, there is no need to have these translated into Dutch.

Formally foreign company

If your organisation qualifies as a formally foreign company, the rules are a little stricter. The company is required to file its financial statements in accordance with Dutch law. A company qualifies as a formally foreign company if:

• it has been incorporated outside the Netherlands, under non-Dutch law; and
• it operates exclusively or almost exclusively in the Netherlands; and
• it has no real ties with the state in which it was incorporated (and the law of that state).

Failure to file

Compliance with the filing obligation is not self-evident for all legal entities, whereas failure to file can have far-reaching consequences. If the company do not file its financial statements or file them late, it can be accused of an economic offence, which makes it liable to a fine of up to € 21,750. The company can also be taken to court.

Need help?

In recent years, the Dutch Tax and Customs Administration has announced on several occasions that they will be cracking down on non-compliance. To avoid unwelcome surprises, we urge you to duly file your financial statements. Please do not hesitate to contact an Accon International adviser if you have any questions or require assistance. You can email your questions to international@acconavm.nl or reach out to your contact person. Together we can help you grow your business, with a focus on the future.